Monday, February 25, 2008

Stage 6 is closing

YouTube has a solid control of "video sharing", not because the quality of videos are great, but its because of the exposure you get from such a huge number of users.

Stage 6 came in late in the game, and really offered the videos with an unlimited improvement of quality. Unfortunately, what it became was a divx sharing network (mainly copyrighted movies, tv shows, and even video clips). It definitely would have become a leader for that type of content. Unfortunately, its not legal, and it also created a problem with capacity and bandwidth. Who creates HD content? Not everyday users shooting video on their cell phones and pocket cams.

Divx itself is an awesome codec, and superior to flash video in almost every way. Unfortunately, with the level of efficiency you would expect less space required for video storage, but on the contrary, people were uploading 350-700MB copyrighted videos.

But who really screwed up? The founders of Stage 6. Stage 6 had a lot of potential, but I have the feeling they did not take it as seriously as they should have. First, put a 100MB limit. This would discourage people putting up shows and movies.

The UI seemed amateurish. It was very innovative, and I really loved most of it, but there were a couple of fundamentally wrong things that needed better decision. One being is the pain in the ass log on system. C'mon. A site that discourages people from logging on by making it a pain? You need to be able to sell this number to advertisers. Tell the advertisers, I have this number of male and female users at this age range, and their interests are ... But nope. They did not care. They could have secured some advertising, but yet again, their business savvyness was very lacking. I don't think it was their expertise or priority.

I found some crucial bugs, one with video resolution, and the other with the object embed links. I emailed them how to fix it easily. Basically their object embed links that were automatically generated were broken, and I told them how to fix it. You want people to post stage6 videos to forums and blogs (free advertising??), but they pretty much prevented people from posting videos by not fixing this bug. You can fix the links yourself, but I don't think most people was expecting to do that. Knowing how to fix it, I still would not bother unless I really had to. With my love of Stage 6, how many stage 6 videos did I post on my blog, and how many youtube videos have I posted here? I like point and click convienience as much as the next guy. This just tells me that their business plan did not exist.

I saw their message saying they really tried to keep stage 6 alive by selling it or spinning it off into a business. If they really knew how to sell it, I would have to make the assumption, because of what I noticed mentioned above, that their focus on what they were selling was wrong. It is great technology and great content but that is the interest of the users, not the buyers of business. It also seemed like a good percentage of users were crying for an option to make stage 6 a paid service and they'd be happy to pay. I got the feeling that they assumed not to even try this even though I'm sure it crossed their mind. So they pretty much gave up without even trying.

Here is what I would have done:

  • Keep users logged in using cookies and sessions to track registered users who have logged in before, like YouTube.

  • Fix the damn embeded links generation.

  • Push for registration, but don't force it. YouTube does it by requiring you to register to watch mature content which might be something like someone breaking their leg, or some extreme political activisim. Its the right amount of incentive to register without pushing users away. It is the brilliant yet subtle way YouTube does things that make them successful.

  • Put some intelligence in gathering better demographic information from registered users. Track some patterns on what the users like to watch so you can do some targetted advertising. This is google territory.

  • Create premium accounts for paying members. Obviously people were willing to pay. Whether it would be to upload content, or watch content at HD, or download the file, or have more priority when downloading, they had a lot of options. They did not even try. Again, it is infinitely better to say, yeah, we got 10,000 users out of 1 million who are paying $5 a month, rather than telling your buyers, "I'm not sure if people are willing to pay. We never tried."

  • Hire a marketting and sales team to sell ads. When you show your buyers you already have made some money, even if it is a little, it is infinitely better than saying "no, we haven't made any money yet, but you can probably sell advertising if that's what you might want to do."

  • Brainstorm how potential buyers could benefit from the technology, content, and demographics, and sell a projected outcome. The above needed to be done before you can take this step.

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